Seven black-owned automotive component suppliers are currently undergoing an 18-month training programme, with the aim of supplying some of South Africa’s vehicle manufacturing plants in future, says Trade and Industry Minister Dr Rob Davies.
Responding to a question in Parliament this week, he noted that five of these suppliers were being developed as tier-one suppliers into the Volkswagen Group of South Africa (VWSA) supply chain, while the other two were being developed as tier-two suppliers into the Toyota South Africa Motors (TSAM) value chain.
Tier-one suppliers are typically larger than tier-two suppliers and provide their product, such as complete seating or dashboard systems, directly to vehicle manufacturers. Tier-two suppliers often provide their products directly to tier-one suppliers.
The project is being driven by the Automotive Supply Chain Competitiveness Initiative (ASCCI), noted Davies.
Government, industry and labour formed ASCCI in 2013, with the purpose of promoting supplier competitiveness and local parts content within the local automotive manufacturing industry.
The initiative is co-funded by government and industry.
ASCCI identified value-chain specific gaps and developed interventions necessary to address them, explained Davies.
For the black-supplier development initiative, VWSA and TSAM are contributing R250 000 per firm to the programme, with ASCCI also contributing R250 000 per firm. Each supplier is contributing R18 000 to the initiative.
In another project to improve and broaden supplier competitiveness, ASCCI’s World-class Manufacturing programme has been delivered over a number of phases since inception, with the third phase concluded in August.
In total, the programme had supported around 70 auto manufacturing suppliers in the country to remain competitive, noted Davies.
In terms of localisation projects, ASCCI has identified three strategically important value chains for further development, namely drive systems, seat systems and interior trim.
A new programme aims to support the development of five to seven suppliers per value chain, with the objective of directly supporting localisation and transformation, said Davies.
ASCCI had also launched a tier-two localisation project focused on three components, namely metal pressings for body systems, wiring harnesses and carpenting and trim.
Davies added that locally based vehicle manufacturers have increased spending on training from R177-million a year, in 2013, to R574-million, in 2017.